The row over Persimmon Group CEO Jeff Fairburn’s initial £110m – later reduced to £75m – pay packet seems to have resulted in his departure from the company.
Persimmon have announced that ‘by mutual agreement and at the request of the Company’ Fairburn is to step down, adding that he will receive no further payments of salary or provision of benefits, including pension, after 31 December 2018.
While praising Fairburn’s contribution to doubling Persimmon in size the company’s announcement said: ‘The Board believes that the distraction around his remuneration from the 2012 LTIP scheme continues to have a negative impact on the reputation of the business and consequently on Jeff’s ability to continue in his role.’
The 2012 Persimmon Long Term Incentive Plan (LTIP) has been widely criticised by shareholders, politicians and corporate governance experts. Critics point not only to the size of the uncapped bonuses but for the way in which it was introduced and a mechanism under which directors could benefit for mediocre (or even poor) share performance.
Fairburn’s departure may go some way towards extricating Persimmon from some unwelcome limelight in the short term. However, the longer term problems of rewarding directors of well-performing companies spectacularly, whilst still being seen to be ‘responsible’ in the public eye, are unlikely to go away.